Osaka Gas to withdraw from coal-fired power station project (updated)

UBE

24/04/2019 10:59

(Adds J-Power announcement)
    TOKYO, April 24 (Reuters) - Japan's Osaka Gas Co Ltd
 9532.T  said on Wednesday that it will pull out of a plan to
build a coal-fired power plant in Yamaguchi, western Japan,
citing changes in the electricity market and future business
risk. 
    Osaka Gas had planned to build a 1.2-gigawatt (GW)
coal-fired power station in the city of Ube in Yamaguchi
prefecture, aiming to start operations around 2026. Electric
Power Development (J-Power)  9513.T  and Ube Industries Ltd
 4208.T  are partners in the project. 
    J-Power said it and Ube Industries have agreed to continue
the plan to build a coal-fired power plant, but they will halt
an environment access process to revise the plan. 
    "We will consider scaling down the size to a single
600-megawatt ultra super-critical (USC) power plant or building
a few 300-megawatt integrated gasification combined cycle (IGCC)
plants," J-Power Executive Managing Officer Hitoshi Kanno told a
news conference. 
    IGCC plants reduce carbon emissions by about 15 percent
compared with USC units as IGCC's power-generating efficiency
stands near 50 percent, higher than the most advanced USC's 43
to 44 percent, Kanno said. 
    J-Power and Ube aim to revise the plan within two years,
with J-Power likely taking over the stake owned by Osaka Gas in
the project, he said. 
    A spokesman at Osaka Gas said the company's decision
reflected concerns over tighter regulations on coal power
stations after 2030 and intensifying competition after the
liberalisation of the power market in Japan. 
    The move by Osaka Gas comes after other Japanese companies
have withdrawn from new coal-fired power projects amid growing
global pressure for companies to divest coal assets due to
environmental concerns. 

 (Reporting by Yuka Obayashi; Editing by Richard Pullin and Tom
Hogue)
 ((Yuka.Obayashi@thomsonreuters.com; +813-6441-1798; Reuters
Messaging: yuka.obayashi.thomsonreuters.com@reuters.net))